Dr. Cheryl Moore

CEO, Prestige Countertops & Services

Like a New Year’s Resolution, we tend to say we are going to make changes, but then we do not carry through…Can you believe we are already through the first quarter of 2021?   Time flies, right?  As we start into the second quarter, I would encourage you to revisit and evaluate the processes and projections you implemented for this year and gauge your successes and failures so far. 

In my January SRG article, Opportunities and Obstacles in 2021, I suggested evaluating your current and prospective markets, sales projections, workforce, finances, and technology. Yes, again, basic business acumen, but like a New Year’s resolution, we tend to say we are going to make changes, but then we do not carry through, or we do not take the time to assess how we are doing.

Did you implement the proper changes and personnel to achieve your stated goals?  What are additional areas for consideration?


Overhead

As you review your short-term and long-term strategies, I would like to suggest evaluating your supply chain and operating activities to identify your value added and non-value-added activities. Reducing or eliminating non-value-added activities enables you to reduce your costs and increase your bottom line. It takes time to identify and cost each activity, but once you have completed the process you can confidently assign your overhead costs to your jobs. This process helps to ensure you are not losing quoted jobs due to overpricing or losing revenue on an awarded job because you underpriced it. 


Sales Goals

As you close out the first quarter, are your sales where you projected and on track to meet or improve your projections? If not, can you pinpoint where your discrepancies are at? Is your advertising or marketing ineffective? Are you giving your sales personnel proper time and funding? Are you responsible for sales and you are not following or seeking out leads? 

It is easy to get busy and not consider third and fourth quarter sales right now. This, however, is very poor planning and can result in unexpected business results come the end of the year. Accountability is key in all these areas.


Production Goals  

Whether you are a small two or three person shop or a large 50-to-100-person shop, production can make or break a company. In my January article, I discussed the importance of having the right people on board with you. Do you have the right Project Manager and the right person in charge of production? Are you getting your jobs completed on schedule with the quality your customers expect? How do your employees represent your company outside of your shop? How efficient are you with customer follow-up and service issues? 


Technology

In the January issue, I suggested preparing cost projections and a return-on-investment analysis to see if the time is right for you to invest in technology. If you are a small shop, and have not already made these investments, I can tell you from experience upgrading to a digital templating machine, CNC production machines and polishing machines will help you grow by expanding your productivity and quality, without the need to hire more employees. If you are not moving forward, you will go backwards. 


Expenses

Have you considered ways to reduce basic expenses? Examples include reducing utility expenses. Given the amount of water used in this business, have you considered a water recycling system? Perhaps savings can be found by changing all your lighting with new LED fixtures or replacing your heating system with a new highly efficient unit. These are savings that can be added to your bottom-line long term. When it comes to expenses, consult your accountant, and discuss available tax credits.


Financing and Loans

I also suggested in January to form close relationships with your banker and your accountant if you do not have these relationships already in place. These individuals will have suggestions and options for you that you may not have thought of, or you just need further information and clarification to see if something is a viable option for your business. 

 Did you take advantage of the PPE loan offered last year? If you did, have you considered applying for the second PPP loan? The newest PPP loan being offered is simpler to apply for than the first one. 

Again, ask your accountant, but the current PPP loan being offered seems to have the basic requirement of showing a 25 percent reduction in gross receipts between any comparable quarter from 2019 and 2020. If you qualify for the PPP loan, and when you find out how much you qualify for, you can figure out how and where this can help you going forward.

So, I am going to put the Opportunities and Obstacles in 2021 to rest now, but I wanted to revisit it since we are through our first quarters. As we get busy with running our businesses and dealing with our daily routines, we sometimes need the reminder to continue to plan ahead and make sure we are strategizing for the long-term, as well as looking at what we are currently focusing on.


Cheryl Moore is the CEO of Prestige Countertops & Services, Inc. and an Assistant Professor of Accounting at Mercyhurst University. If you would like additional information, please email her at cmoore2@mercyhurst.edu .